GST on Courier Charges: What Is Taxed, at What Rate, and What You Can Claim

Courier and logistics services in India attract GST at 18%. That part is simple. The part sellers get wrong is what the 18% is charged on.

The taxable base is not just freight

GST applies to the whole service charge, which on a COD order means freight plus the COD collection fee.

Line	Amount
Freight	₹80.00
COD fee	₹42.00
Taxable value	₹122.00
GST @ 18%	₹21.96
Invoice total	₹143.96

Computing GST on the ₹80 alone gives ₹14.40 and understates the bill by ₹7.56 — about 5% of the total. Repeat that across a few thousand shipments a month and it is a real hole in a forecast.

Input tax credit

If you are GST-registered and the shipment is for your business, the ₹21.96 is input tax credit you can set against your output liability. Two conditions matter in practice:

1. The invoice must carry your GSTIN. Add it to your account before you start shipping, not after — invoices already raised cannot be reassigned to you.
2. It has to appear in your GSTR-2B. That depends on your logistics provider filing correctly. Reconcile monthly rather than at year end.

What this means for your product pricing

If you offer free shipping, you are absorbing the whole ₹143.96, not the ₹80 you probably budgeted. Sellers who model shipping as “freight only” are typically understating their delivery cost by 25–30% once the COD fee and GST are counted.

Price the all-in number, or set a free-shipping threshold above the point where the all-in cost stops hurting.

Frequently asked questions

What is the GST rate on courier services in India?

18%, under SAC 9968 for goods transport by road other than by a GTA, and the courier services classification more generally. Your invoice will show it as CGST + SGST for an intra-state movement or IGST for inter-state.

Is GST charged on the COD collection fee?

Yes. It forms part of the taxable value of the service.

Can I claim GST on shipping as input credit?

If you are registered and the shipment is a business expense, yes — provided the invoice carries your GSTIN and the supplier has filed it so it reaches your GSTR-2B.

Do I charge GST on shipping I recover from my customer?

Shipping recovered from a customer generally forms part of the transaction value of the goods and is taxed at the goods’ rate. Take this one to your accountant; it depends on how your invoice is structured.